Where buyers have an edge and sellers are cutting prices
If you've been keeping an eye on the real estate market lately, you might have noticed an interesting trend: there are a lot more price reductions on homes for sale than there are price increases. This can be great news for homebuyers looking to snag a deal.
When a home’s price gets reduced, it’s usually because the seller wants to attract more buyers or move the property quickly. For buyers, these reductions are a big deal. It means you might get the home you’ve been eyeing at a lower cost than you initially expected. And who doesn’t love a good deal?
But these price reductions are more than just a discount – they're an opportunity. They can make homes more affordable and give you more room to negotiate other aspects of the purchase. It’s like the market is giving you a little nudge, saying, “Go ahead, make your move!” It could be your chance to get your dream home at a dream price.
The reasons for reductions
When a seller decides to reduce their asking price, it's often a strategic move to adapt to the current market and attract more buyers. One big reason is market competition. If there are a lot of similar homes for sale in the same area, lowering the price can make a property stand out. By offering a more attractive price, sellers hope to catch the eye of more potential buyers and speed up the sale process.
Another reason sellers might drop their asking price is feedback from the market. If a home has been listed for a while without much interest or offers, it might mean the original price was too high. Sellers pay attention to feedback from showings. If it seems like buyers aren’t seeing the value at the current price, a reduction can make the home more appealing. This can bring in new interest and attract buyers who might have been put off by the higher price.
Timing and personal circumstances also play a big role in price reductions. Sometimes sellers need to move quickly due to a new job, family needs or financial reasons. In these cases, reducing the price can help sell the home faster, allowing the seller to move on with their plans. Market conditions, like seasonal trends or economic changes, can also prompt a price cut to match buyers' expectations and purchasing power, keeping the property competitive and appealing.
Notice a similarity in many of the reasons for price reductions? It’s to speed up the process. When the seller reduces the price, you may have to move quickly to take advantage of the lower price. Take advantage of Same Day Mortgage to help you get approved quickly and to the closing table on your seller’s timetable.
Taking advantage of a price reduction
As stated above, a reduced price often indicates that the seller is motivated to close the deal quickly, which can lead to more favorable negotiations for the buyer. This scenario can result in not only a lower purchase price but also the potential for additional concessions, such as covering closing costs or including home appliances.
Introducing Price Change Ratio
To show you where buyers have the edge across the country, we took a look at June 2024 data from the Realtor.com® Economic Research team and analyzed the top 200 markets. We compared how many homes listed in each market had price increases versus those that had price cuts to create what we call the Price Change Ratio. The greater the Price Change Ratio, the more home prices are being cut and the bigger edge that homebuyers have.
There are a few markets that didn’t have any price reductions, which suggests that those are great markets for buyers. We’re unable to calculate the Price Change Ratio for those markets because we can’t divide by zero, however. That’s why these first twelve entries have N/A for the Price Change Ratio.
But no matter the ratio, here are the markets that are definitely tipping in buyers’ favor right now.
Roanoke, VA
- Median Listing Price: $379,950
- Active Listings: 550
- Price Increased Count: 0
- Price Reduced Count: 280
- Price Change Ratio: N/A
Springfield, MA
- Median Listing Price: $412,498
- Active Listings: 582
- Price Increased Count: 0
- Price Reduced Count: 204
- Price Change Ratio: N/A
Canton-Massillon, OH
- Median Listing Price: $255,000
- Active Listings: 407
- Price Increased Count: 0
- Price Reduced Count: 164
- Price Change Ratio: N/A
San Luis Obispo-Paso Robles, CA
- Median Listing Price: $1,207,500
- Active Listings: 462
- Price Increased Count: 0
- Price Reduced Count: 156
- Price Change Ratio: N/A
Santa Maria-Santa Barbara, CA
- Median Listing Price: $2,137,000
- Active Listings: 529
- Price Increased Count: 0
- Price Reduced Count: 144
- Price Change Ratio: N/A
Green Bay, WI
- Median Listing Price: $466,450
- Active Listings: 414
- Price Increased Count: 0
- Price Reduced Count: 140
- Price Change Ratio: N/A
Utica-Rome, NY
- Median Listing Price: $265,000
- Active Listings: 403
- Price Increased Count: 0
- Price Reduced Count: 108
- Price Change Ratio: N/A
Manchester-Nashua, NH
- Median Listing Price: $598,000
- Active Listings: 345
- Price Increased Count: 0
- Price Reduced Count: 104
- Price Change Ratio: N/A
Erie, PA
- Median Listing Price: $262,400
- Active Listings: 214
- Price Increased Count: 0
- Price Reduced Count: 100
- Price Change Ratio: N/A
Norwich-New London, CT
- Median Listing Price: $549,900
- Active Listings: 387
- Price Increased Count: 0
- Price Reduced Count: 92
- Price Change Ratio: N/A
Charleston, WV
- Median Listing Price: $169,950
- Active Listings: 356
- Price Increased Count: 0
- Price Reduced Count: 92
- Price Change Ratio: N/A
Appleton, WI
- Median Listing Price: $424,900
- Active Listings: 323
- Price Increased Count: 0
- Price Reduced Count: 64
- Price Change Ratio: N/A
Pittsburgh, PA
- Median Listing Price: $259,900
- Active Listings: 3,990
- Price Increased Count: 16
- Price Reduced Count: 1,664
- Price Change Ratio: 104
Chattanooga, TN-GA
- Median Listing Price: $425,000
- Active Listings: 1,673
- Price Increased Count: 8
- Price Reduced Count: 768
- Price Change Ratio: 96
Kingsport-Bristol, TN-VA
- Median Listing Price: $324,900
- Active Listings: 660
- Price Increased Count: 4
- Price Reduced Count: 360
- Price Change Ratio: 90
Longview, TX
- Median Listing Price: $319,450
- Active Listings: 899
- Price Increased Count: 4
- Price Reduced Count: 360
- Price Change Ratio: 90
Asheville, NC
- Median Listing Price: $610,000
- Active Listings: 1,443
- Price Increased Count: 8
- Price Reduced Count: 656
- Price Change Ratio: 82
New Orleans-Metairie, LA
- Median Listing Price: $335,000
- Active Listings: 5,125
- Price Increased Count: 24
- Price Reduced Count: 1,748
- Price Change Ratio: 72.83
Madison, WI
- Median Listing Price: $499,950
- Active Listings: 861
- Price Increased Count: 4
- Price Reduced Count: 280
- Price Change Ratio: 70
Scranton—Wilkes-Barre, PA
- Median Listing Price: $264,950
- Active Listings: 769
- Price Increased Count: 4
- Price Reduced Count: 268
- Price Change Ratio: 67
Boulder, CO
- Median Listing Price: $900,000
- Active Listings: 1,165
- Price Increased Count: 8
- Price Reduced Count: 512
- Price Change Ratio: 64
Cedar Rapids, IA
- Median Listing Price: $299,250
- Active Listings: 622
- Price Increased Count: 4
- Price Reduced Count: 240
- Price Change Ratio: 60
Duluth, MN-WI
- Median Listing Price: $359,900
- Active Listings: 591
- Price Increased Count: 4
- Price Reduced Count: 220
- Price Change Ratio: 55
Mobile, AL
- Median Listing Price: $270,000
- Active Listings: 1,161
- Price Increased Count: 8
- Price Reduced Count: 432
- Price Change Ratio: 54
Toledo, OH
- Median Listing Price: $275,000
- Active Listings: 883
- Price Increased Count: 4
- Price Reduced Count: 208
- Price Change Ratio: 52
Trends in the findings
Several key trends emerge from the list of cities with significant price reductions and varying Price Change Ratios. There is a larger representation from mid-sized cities, though a few larger markets like Pittsburgh and New Orleans are present as well.
Many of the markets listed above have median listing prices lower than the nationwide median listing price. But luxury markets like San Luis Obispo-Paso Robles, CA and Santa Maria-Santa Barbara, CA, are also experiencing significant price reductions, showing that even high-end markets are adjusting prices to align with buyer affordability and demand.
Overall, these trends underscore the importance for buyers to understand local market dynamics and seize opportunities presented by price reductions across different regions and market segments. Working with local experts, especially a local loan officer, can help you take advantage of price reductions in your town.
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